Founding Partner
Fueling IP And Energy Innovation: Where Are We Headed?
By Helen Smith
Helen Smith is a second-year J.D. Candidate and Law Student at Elisabeth Haub School of Law at Pace University. She interned at Gearhart Law during the summer of 2022, and plans to specialize in Intellectual Property and Entertainment Law.
Conservation of the environment has been prevalent throughout world history, with the earliest forms of renewable energy being documented as the waterwheel (200 B.C.), followed by windmills (1590s), and the first solar power system (1860). During the mid-18th to early 19th centuries, the Industrial Revolution had become the conservation movement’s biggest competitor yet. Both the fuel and green energy industries have utilized IP protections over their development and innovations through history, predominately patents, which has been an important component of fostering entrepreneurship, technological advancements, and even providing protection for our environment.
For historical context, conservationists had the societal upper hand when the very first U.S. National Park, Yellowstone, was established in 1872. Then, in 1885, the first gasoline pump was manufactured by Sylvanus Bowser, and it was not until 1895 that the first U.S. patent for a gasoline-powered automobile was issued to Charles Duryea, increasing investment in the industry. By the early 20th century, oil companies were producing gasoline as a distillate from petroleum. Fuel companies continued to work to improve engine efficiency and in 1913, William Meriam Burton received a patent for his cracking process, which converts oil to gasoline. The industry continued reforming, making improvements in engine efficiency, gas production volume, and finding new sources of fuel.
Through and after events like the Great Depression and two world wars, where fuel and industrial resources were prevalently used, the modern environment movement had finally developed. The Hoover Dam was completed in 1935, supplying power to the Southwest U.S. By 1949, almost 1/3 of the country’s electricity came from hydropower, today’s largest form of renewable energy. The oil industry saw there was a need for improvement in the refining process for fuels that would prevent engine knocking and increase engine efficiency in the newly designed high compression automobiles. In 1960, Charles Plank and Edward Rosinski patented the first zeolite catalyst commercially useful for catalytic cracking of petroleum. ThouhgtCo.com describes cracking as “a process by which heavy hydrocarbon molecules are broken up into lighter molecules by means of heat, pressure, and sometimes catalysts”. Petroleum is turned into lighter products such as gasoline, which increases gasoline production volume. Ten years later, on April 22, 1970, the first Earth Day was celebrated. This national celebration created a rare political alignment, gaining support from all different classes of people across America. Soon after, the Environmental Protection Agency was established by President Nixon and subsequent landmark environmental legislation followed, such as the Clean Water Act, the National Scenic Trails Acts, and the Clean Air Act, which specifically created major changes for gasoline with the goal of eliminating pollution.
In 1995, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, which was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) from 1986–1994, became effective. This agreement introduced intellectual property law into the international trading system with established minimum standards for the international treatment of intellectual property. It was also an attempt to narrow the gaps in the way these rights are protected and enforced around the world, and to bring them under common international rules. In the 21st century, the total number of international applications filed and published under the WIPO PCT for renewable technologies increased 3.5 times from 2002 to 2019. According to WIPO, the US was also the second leading country in renewable energy patents from 2010-2019 with 6,300 patents filed, Japan being the first with 9,394.
In recent years, the realm of intellectual property rights has become a battleground for the oil/gas and green energy industries in an increasingly hostile environment. Litigation of energy patents has even been on the rise since the early 2010s. With the expanded global effort to combat extreme changes in the environment, and prevent more, many changes have been put in place that affect how the national and global patent systems handle new, green technology.
Through the COVID-19 pandemic, the WTO signed a waiver to the TRIPS agreement, inducing the pharmaceutical/biotech industry to make vaccines for the pandemic, but not as a result of them being moved by the public’s need. IP Watchdog describes the medical industry’s response to this waiver as “monetary incentives provided against a predictable legal system that induced economic investments in vaccine making”. While this decision provides for widespread availability of vaccines, many believe this could be the beginning of the federal government breaking down the institution of IP, even giving way for something to the effect of a “WARP Speed 2.0” relating to energy sources.
However, as discussed, the shift away from fossil fuel to alternative energy was well underway before the COVID-19 pandemic, causing oil companies to transition away from refining, and focusing on an alternative energy future. President Biden’s campaign focused on putting an end to the use of fossil fuels and shift the U.S.’s primary energy source to renewable energy, with the idea in mind of leading the global effort to a cleaner world. The white house and federal agency officials have even been pushing for the American public to switch to electric vehicles, taking away their worries of emitting fuels into the environment and their need for gas among skyrocketing prices. With the closing of the Keystone pipeline and cancelation of gas leases on federal land and in other regions in the hemisphere, deflation of production and supplies has resulted in increased prices for more than just gasoline, but for areas of commerce that rely on gasoline to fuel production or transportation. The demand for energy has been on the rise, but global production has decreased.
Other world leaders today seem to be another growing threat to energy IP, taking this as an opportunity to push for the widespread availability of green energy resources and IP waivers. In late June 2022, United Nations Secretary-General, Antonio Guierres, called for all intellectual property rights on clean energy technologies to be scrapped, and the innovations handed over to developing nations for free. He said, “I have called on G20 governments to dismantle coal infrastructure, with a full phase-out by 2030 for OECD countries and 2040 for all others. I have urged financial actors to abandon fossil fuel finance and invest in renewable energy.” Guierres proposed a five-point plan to increase renewable energy around the world: (1) make renewable energy technology a global public good, and remove intellectual property barriers; (2) improve global access to supply chains for renewable energy technologies components and raw materials; (3) allowing for fast-track approvals of solar and wind projects and more effort to modernize electricity grids; (4) shift energy subsidies from fossil fuels to protect vulnerable people from energy shocks investing in a “just transition to sustainable future”; and (5) triple investments in renewables.
As IP Watchdog analogizes: “Would you invest in a home and bother maintaining it if you knew the government might condemn it for public use even though your name is on the deed?” It can be said that waivers of this sort, that allow for the removal of IP protections, are likely to influence entrepreneurs’ investment incentives to develop better technologies. On the other hand, some innovationists, such as Elon Musk, have happily released their renewable energy patents to the public, seeing it as an opportunity to improve the technology through competition. Upcounsel.com discusses that while patents were originally used to protect Tesla’s intellectual property, Musk has “since realized that those same patents were constricting an industry he had hoped to expand. The rise of electric vehicles must be driven by market competition, so it can appeal to as many consumers as possible.”
Currently, most clean energy solutions are simply not developed enough to be able to provide an answer to the demands of a 21st century economy. The technology has not been innovated or invested in enough to be relied on by the masses across the globe, not enough at least to completely obliterate the oil and gas industry. “Clean-tech” energy cannot echo the progress of digital technologies, as many think it can. IP Watchdog says, “Either multiple paradigms must shift in multiple technology sectors in order make alternative, clean energy a viable solution to replace fossil fuels, or we need generations of progress at the current pace.”
Natural gas and green energy industries have been contemporaneously improving developments in their respective fields of IP for over 100 years, and green energy simply could not continue to make the kind of progress as seen in the oil industry if innovation and entrepreneurs’ rights cease to be supported and protected by national and global leaders.
Sources:
Infographic: https://www.oilandgasiq.com/legal-and-regulatory/whitepapers/infographic-the-tip-of-the-spear-intellectual-pro
https://www.linkedin.com/pulse/impact-intellectual-property-developing-green-ashish-sonawane/
TRIPS: https://www.wto.org/english/docs_e/legal_e/27-trips_03_e.htm
“Articles 7 and 8 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) play a central role in assuring the members of the World Trade Organization (WTO) the right to implement public health measures.”: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3632941
https://www.thoughtco.com/history-of-gasoline-1991845
https://www.treehugger.com/what-is-the-green-movement-1708810
https://www.wipo.int/wipo_magazine/en/2020/01/article_0008.html
https://www.upcounsel.com/car-patents#tesla-releases-electric-car-patents-to-public
https://www.linkedin.com/pulse/impact-intellectual-property-developing-green-ashish-sonawane/
https://law.vanderbilt.edu/news/trips-agreement-drafting-history-and-analysis/https://www.manhattan-institute.org/mines-minerals-and-green-energy-reality-check